Foreign Affairs Committee on May 25th, 2009

[Lois Brown, Conservative, Newmarket—Aurora, ON]

—serious considerations go into making these investments. They are not making frivolous investments; they are ensuring—

[The Chair, Conservative, Kevin Sorenson]

Thank you, Ms. Brown. We'll leave it at that.

We'll go to Mr. Dewar.

[Paul Dewar, NDP, Ottawa Centre, ON]

Thank you, Chair.

And thank you, Mr. McKay, for being here today and for your initiative.

You are aware of what SEMA is, the Special Economic Measures Act. It's interesting to note that when others say we normally don't intervene with companies vis-à-vis their economic investments overseas, this government invokes SEMA. In fact, this government brought forward SEMA, and in fact what it does is restrict investment. And that, of course, is out of cabinet.

So I want to put on the record that the whole notion that governments act for the benefit of people overseas when it comes to Canadian investment is not only something that is done, but also that it was this government that has done it. And I was one of the ones who pushed to do that in Burma, along with colleagues.

I don't know, but is this government saying that if a company says everything is fine in Burma, then we just look the other way? The last time I checked, things weren't fine in Burma—and they're not fine in the Congo.

And I want to touch on what's happening in the United States, because right now there's a piece of legislation there that, it could be argued, is a lot stronger than your modest private member's bill—which I fully support, and I thank you for bringing forward. It actually is going to trace where minerals are coming from. And they're in fact looking at something analogous to what we Canadians put together with the Kimberley process on blood diamonds. They'll be looking at blood coltan and other things.

So I have to say that I'm really surprised at the reaction you're getting. It is a modest bill. As you mentioned, the round table report represents a consensus of business opinion, and Mr. Abbott should know that. He should read it. It's worthy reading. Read who was there. Business was there. Civil society was there. It took this government two years to make recommendations, and you are absolutely right in saying they go nowhere in terms of being as strong.

Mr. McKay, if Mr. Abbott, for instance, thinks everything is fine, then he shouldn't have a problem with your process. If there's no problem, then this is something that companies should welcome.

I just want to get an opinion from you, Mr. McKay. If you see the opposition to your modest bill going forward, do you think it's a matter of us policy-makers just not getting it, that we just don't know what's going on around the world? I ask because I could, for instance, spend far too much time telling you about what I heard in the Congo. And what I heard in the Congo, Mr. McKay, was that we need to do this. What they asked me in the Congo was, why are your companies coming in here and making money and handing over money to militias who are taking lives? Some of the worst incidents of violence against females right now are connected to our mining operations—and you can't wash that away.

So I would ask you, Mr. McKay, if you think the opposition to this is a matter of ignorance, or is this a matter of people just thinking governments shouldn't be involved in this? And if they think that, then I'd ask them to look up SEMA and ask why we are invoking SEMA in places like Burma.

[John McKay, Liberal, Scarborough—Guildwood, ON]

I prefer to attribute good motives than bad. And I'd prefer that Canadian companies be operating on the up and up, and that we'd all be proud of those Canadian companies, etc. You have more experience than I do in terms of actually seeing some of these things, and we will have other witnesses come in and give testimony about these things.

But there is a problem here, and this is a fairly modest response to a problem. And a lot of people are pretty upset with this very modest response to the problem.

To go back to both Mr. Abbott's observations and yours, I'm looking at an annex to the National Roundtables' advisory group report, which included the Prospectors and Developers Association of Canada, Global Sustainability Services, Placer Dome, the VP of exploration for IAMGOLD, Talisman Energy, and the Mining Association of Canada—

[Paul Dewar, NDP, Ottawa Centre, ON]

It sounds like a left-wing conspiracy to me.

[John McKay, Liberal, Scarborough—Guildwood, ON]

No, no, that's the next page.

I have four or five pages of witnesses here. In fact, it's more than five pages; it's seven pages of witnesses. So it seems that for me to conduct another round table, a round table by John McKay, would be somewhat redundant.

[Paul Dewar, NDP, Ottawa Centre, ON]

In light of the fact that it seems there are some people who think the sky is going to fall, you've put this forward in good faith. I've talked to you about the bill and my support for it. You know that there was a hope to have actually a stronger proposal put forward, and you quite rightly underline the fact that an ombudsman is not possible because of the constraints of having a private member's bill dependent upon a royal recommendation.

But I sense from your presentation that you would hope that the counsellor position that now exists could play that role and would fit nicely into your proposal.

[John McKay, Liberal, Scarborough—Guildwood, ON]

I'd like to fold the two in, and then you wouldn't have a counsellor who is subject to an order in council, which, as Mr. Abbott rightly describes it, is a whimsical appointment by either a Liberal Prime Minister or a Conservative Prime Minister. There would therefore be consequences.

The framework that I criticized, I think, has legitimate criticisms. I'd renovate that so that reports are meaningful and timely.

[Paul Dewar, NDP, Ottawa Centre, ON]

Have you received communication and support from faith communities for your bill?

[John McKay, Liberal, Scarborough—Guildwood, ON]

The Development and Peace group has been a huge supporter, as well as the Mennonite Central Committee, World Vision, KAIROS, and so on. I have a list.

[Paul Dewar, NDP, Ottawa Centre, ON]

Why do you think they're supportive of the initiative?

[John McKay, Liberal, Scarborough—Guildwood, ON]

All of them—or I won't say all of them, but many of them—are on the ground: the Evangelical Fellowship of Canada, the Fredericton Peace Coalition, World Vision, AfricaFiles, the Mennonite Central Committee, KAIROS, MiningWatch, Amnesty International, the United Church of Canada, the Harvard human rights program. A lot of them have made observations, like you, on the ground of things that are going on in the corporate social responsibility area, and they think something needs to be done. So here we are.

[Paul Dewar, NDP, Ottawa Centre, ON]

Thank you.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, Mr. Dewar.

Mr. Van Kesteren, please.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Mr. Chair; and thank you, Mr. McKay.

I'm a visitor here, as you were a visitor last week at an industry, science and technology session that I was chairing. You mentioned the Prospectors & Developers Association of Canada. If my recollection is correct, they didn't know you were the author of this bill, but one of the first things they said was, “Kill that bill.” You seem to say that you have their--

[John McKay, Liberal, Scarborough—Guildwood, ON]

[Inaudible--Editor]...over the course of the hearing. He seemed to be more supportive at the end than he was at the beginning.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

I beg to differ. We could go over those minutes. I think there was a little bit of a miscommunication.

You talked about the problems. You touched on those. Can you go a little bit further than touching on the problem? You talked about the tip of the iceberg, and I think you mentioned Goldcorp, Barrick, and another one. Tell us what the problems are. If this is such a serious issue that we need to move legislation that you're suggesting, what are the problems?

[John McKay, Liberal, Scarborough—Guildwood, ON]

I'm in a bit of a dilemma, to be candid about it, because the observations of the problems are not direct evidence on my part. I can't give direct evidence of the problems because I haven't been to Chile, I haven't been to Argentina, I haven't been to the Congo, I haven't been to the Philippines, and I haven't been to Papua New Guinea. You will hear testimony over the next little while about people who actually have, and they made their observations. I think the testimony coming from people who make direct observation is far more effective than mine.

That said, I do put a great deal of faith in the observations of respectable NGOs and, indeed, report after report after report of various activities of the extractive sector around the world. So I don't think it's appropriate for me to give testimony about what is or is not happening at these sites.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

With due respect--and I mean that--I think your intentions are good, but for a bill that will have the ramifications that this one has....

Let's not forget that this is the flagship industry in this nation. I'm trying to recall some of the figures. I think it's something like $8 billion to $10 billion that this industry generates--$2.5 billion in expenditures alone.

I want to go back to what Mr. Abbott was saying. This is a noble gesture. You're telling us, first of all, that you've crafted this bill and you haven't really investigated the allegations. On the other hand, answer that question. I really need an answer to that question as to what's going to happen with these mining companies, because we're going to be the only jurisdiction that's going to enforce these rules. I'm not saying that if there's a problem we shouldn't address it, but if we choose to be the only organization that's going to address these things, what is going to happen to our Canadian mining industry? I'd like to hear again, are you prepared to see those companies just migrate to another jurisdiction?

[John McKay, Liberal, Scarborough—Guildwood, ON]

I'd call your attention to Corporate Social Responsibility: A Legal Analysis, by Michael Kerr, Richard Janda, and Chip Pitts, published by LexisNexis. They make the argument that if Canada passes legislation such as this, everybody will come up to Canadian standards. The reason is that the mining industry is so integrated; when an Australian company buys a Canadian company--which has happened--and has operations around the world, the argument is that they will operate at the highest standards because everything else is just too much grief. It actually brings up everybody.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

You don't think we may possibly have been a little better off to work at this through the United Nations so that we have collaboration right across the globe, rather than trying to set the stage and sacrifice our mining--

[John McKay, Liberal, Scarborough—Guildwood, ON]

If you can deliver that, I'll withdraw the bill in a heartbeat.

[The Chair, Conservative, Kevin Sorenson]

When Talisman left Sudan and China came in, did China come to a much higher standard when they started in oil and gas?

[John McKay, Liberal, Scarborough—Guildwood, ON]

No. I think you're right, and I think Mr. Pearson can probably speak to that better than anyone in this room. There is no question that you do create some interesting ethical dilemmas.

The other interesting point about that is that the Swedish government and the Chinese government are apparently talking as we speak about corporate social responsibility standards. There's nothing we can do to force the Chinese to adhere to better standards. I know, Chair, that you have traveled in Africa extensively, and I know you've heard the same things as I've heard about Chinese corporations acting in Africa in fashions that would make it difficult for us all. I don't think we should be doing the same thing.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. McKay.

Go ahead, Mr. Patry.